Jules Pieri on Curation, Trust, and Daily Grommet’s Deal with Rakuten

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Yesterday the Lexington, MA-based e-retail startup Daily Grommet revealed it had closed a Series B round of funding led by Rakuten, a Japanese e-commerce and Internet giant with CEO Hiroshi “Mickey” Mikitani at its helm.

Let me correct myself, though. Daily Grommet—which each day showcases an independently made, often unknown product with story and video—is not really in the retail space, says CEO and co-founder Jules Pieri, who I caught up with on the phone yesterday. She likens her startup to a farm league for helping smaller merchants and products make it to the big leagues of retail. It even pushes its best products to bigger retailer channels, like its online store at Buy.com, which itself was acquired by Rakuten in 2010 for $250 million.

“I consider us a product launch platform,” she explains. “Retail is an old fashioned, secretive business. No one will tell you how a product does; it’s not in their interest to do so. We’re the opposite. If we know a product is everything it promises to be, we will tell everyone.”

For its part, Daily Grommet has gone from 19 employees to 29 employees over the last two weeks, with a few of those hires coming from Boston Startup School, Pieri says. She’s also recently started a gig as entrepreneur in residence at Harvard Business School, working closely with the newly launched Harvard Innovation Lab. The university is one of many common threads between Pieri and Mikitani, as she explains more below. The Rakuten CEO recently nabbed Harvard Business School’s alumni achievement award (this Wired piece takes a deep dive on the story of Mikitani and his company.)

Pieri had a lot more to say about Daily Grommet’s relationship with merchants, the role curation is playing in online commerce, and her excitement over the deepened relationship with Rakuten, which allows retailers of all sizes to set up online shops on its main e-commerce site, Rakuten Ichiba. You can read the highlights from our conversation below.

Xconomy: What does the relationship between Daily Grommet and Rakuten look like?Jules Pieri: We’re merging two customer bases between Buy.com and Daily Grommet. The cross-pollination is cool, especially because their customer base skews more male and ours more female. We set up a shop with them and they’ve been curating some of our products and finding them nice placement in front of their other products.

It expands their product offering a lot and gives them a chance to test our videos. We’re watching how it works in that community. It’s good for us to help the products we work with succeed anywhere, not just on Daily Grommet. We have evolved a bit; our site is more of an incubator and predictor of large success. We can know within 24 hours whether the product will have an ability to go big. [Rakuten likes] that we’ve already curated them and made sure they’re ready for scale.

X: How did the investment from Rakuten come about?JP: I had known about them for a while. When I finally met them [back in May], I thought, ‘We’re like twins separated at birth.’ The CEO and I thought about the same things.

They play kind of between eBay and Amazon. It’s a true marketplace that any retailer can be on, but Rakuten is different from other players. They really emphasize the people and the story. They don’t start with product; they start with people. They let them build their own store and it’s not as uniform like on eBay, and not hidden like on Amazon.

Rakuten means optimism in Japanese. They say what they do is this empowerment mission. They really enabled a different economy in Japan than otherwise would have existed. So we’re trying to do the same thing. It’s a different expression but both of us level the playing field to ensure the best companies and the best products come in, and not just the big guys.

They’re really revealing the stories, the human beings, behind the stores. It’s kind of chaotic when you go in with an American set of eyes. Japanese people like a lot of information, detail, long pages. With Daily Grommet we execute a lot against speed. We have between 10 and 200 seconds with the customer. We’re lucky enough to have earned trust. But we still have to compete for chunks of time.

X: What exactly will the new funding go to?JP: We have to do three things: grow our community; do more faster, meaning more grommets; and build a business-to-business infrastructure around a Grommet partner.

X: What will that look like?JP: On the external side that means having more partnerships like with Buy.com. That’s first and most important. On the internal side it takes people to manage those well. We just hired somebody from Boston Startup School to work on that. Those kinds of things matter. We have a giant consultative capability with our partners in that we’ve seen so much—we’ve worked with over 1,000 companies, have seen around corners for them, and can help them structure commercial relationships.

X: And Rakuten is also a Pinterest backer, correct?JP: They led the round for Pinterest. It was a $100 million round and Pinterest, as you can imagine, had their choice of anyone in the world. When I saw Ben [Silbermann], the CEO of Pinterest, I asked him … Next Page »